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Work won through OJEU is scant and falling

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New research has revealed just how low the chances are of architects winning projects through the EU procurement system

For most of the profession, the Official Journal of the European Union (OJEU) procurement process for winning publicly funded work is a dreaded, bureaucratic minefield which should be avoided. It is wasteful, anti-risk, frustratingly slow and off-limits to all but a handful of companies.

Now, a damning new report has uncovered figures that seem to support this perception, exposing just how bleak architects’ chances of winning work are.

Drawn up by architects Walter Menteth, Owen O’Carroll (UrbanX Architecture), Russell Curtis (RCKa), and Bridget Sawyers, Project Compass’s landmark research analysed more than 12,000 OJEU notices issued between 2009 and 2014. Its key finding is that the number and value of jobs available to architects are both plummeting.

Those that are on offer are increasingly being lumped together so only the largest companies with an existing track record can realistically bid.

The report shows a disproportionate amount of OJEU architectural work – nearly half of all contract wins (43.4 per cent) – has been hoovered up by about 300 companies. This small clutch of firms makes up just 5.5 per cent of the 4,000 firms to have won work since 2008.

The report reads: ‘In a field where it might be hoped public clients would be seeking dedicated architectural services, rather than from facilitators or providers of generic services, the field is dominated by [multidisciplinary firm] Atkins, with 128 awards.’

In terms of wasted effort, the report reveals that an astonishingly low number of tendered contracts, just 30 per cent, are actually awarded. Many, such as the original 2009 OJEU process for the Windermere Steamboat Museum project – later won by Carmody Groarke – are cancelled before an appointment is made.

For those that are awarded, the time period between advert and award in the UK has also slipped over the five-year period – to 221 days compared with the EU average of 133 days.

More shockingly, since 2008 this country has launched a grand total of just two design contests through the OJEU system. In France there were more than 300 in 2013 alone.  

‘This report is a wake-up call,’ says Menteth. ‘It evidences a five-year unravelling in the direct employment of architects by the public sector, increased competition, declining opportunities, and a migration towards the subcontracting of their professional services.’

Ian Ritchie, director of Ian Ritchie Architects, agrees.

‘It is clear that there has been an increasing bias placed within the OJEU notices which has distorted equality of opportunity,’ he says. ‘Combined with an increasing lack of transparency, this is undermining confidence in them and making the procedure to participate ever more expensive.’

Meanwhile appointments via frameworks are on the up, the report notes. Between 2009 and 2014, framework appointments increased from 22 to 33 per cent of all service awards made. But even if you get on to a framework there is no guarantee of any work.

Despite PRP Architects’ success in winning architectural work through OJEU, its chairman, Andy von Bradsky, describes the process as ‘all frame and no work’.

He adds: ‘Some clients will nominate a long list of architects and run further design and fee competitions for those on the framework. Others have not offered any commissions for the duration of a framework despite [architects] achieving a high scoring submission. The considerable investment made in preparing frameworks submissions to convey the quality and efficiency of our practice does not guarantee success.’

The upshot of all these trends is that many architects are simply boycotting the OJEU process entirely.

Darren Bray of Hampshire-based PAD Studio says his practice gave up on trying to win work through the procurement method six years ago, while Robert Evans of Evans Vettori has been similarly deterred by bad experiences.

‘We put a huge effort into an OJEU bid to be on our regional framework for architectural services,’ Evans says. ‘We came nowhere in the rankings, and haven’t tried OJEU since. The only route to market realistically available to us is as part of a supply chain working for larger multidisciplinary firms. OJEU seems to have been designed for the big boys.’

The best way for architects to win work through OJEU, the Project Compass report suggests, is through so‑called ‘hidden architecture’. Almost half of all opportunities can be found buried in contracts where the developer or contractor is also asked to provide design services, meaning architects have a greater chance if they team up.

The report’s findings have once again caused many to question whether the RIBA is doing enough to push the case for reform.

In 2012 the RIBA pressed the government to reform its ‘frustrating and wasteful’ public procurement system, but to no avail. ‘It is of course much easier to identify the symptoms and diagnose the malaise that afflicts some UK public procurement than to identify effective remedies,’ says Adrian Dobson, director of practice at the RIBA.

The institute has told the AJ it is developing guidance for public-sector procurement bodies, which it says will be available later in the year.

But are architects in some ways their own worst enemies? Rab Bennetts of Bennetts Associates believes the profession’s current issues with OJEU are, in part, down to its own failure to embrace the shift to integrated design and construction teams.

‘Rather than campaign for what would be best for architects’, he says, ‘wouldn’t it be more productive to focus on what would be best for public-sector clients?’

To purchase the full report, visit projectcompass.co.uk

Comment

Rab Bennetts, director, Bennetts Associates
‘The report correctly identifies several public-sector procurement trends that have been evident for some time, but no-one should be surprised. Over 20 years, government-sponsored initiatives and reports by Michael Latham, John Egan, Paul Morrell, Alan Crane, Andrew Wolstenholme and others have called for greater integration between design and construction, but the architectural profession has been ambivalent at best. As a result architects continue to be seen as self-absorbed and aloof from the industry as a whole. It is no surprise, then, that the public sector has forced the issue with the adoption of contractor-led teams, framework agreements and multidisciplinary appointments. If the profession addresses the failings that brought about these challenging forms of procurement we would be in a far better position to lead the design process itself.’

Andrew Beharrell, senior partner, Pollard Thomas Edwards Architects
‘We live in an age of measurability, in the service of every politician’s dream of fairness, transparency and value. The operation of these worthy aims in the field of architectural procurement is far from perfect. We sometimes experience well-run procurement processes, which are effective in matching the client to the architect without requiring excessive input from either – and sadly we also have experience of some appalling processes, which waste a lot of everyone’s time. You can learn how to identify those early on, but architects do love to put hope before experience.’

Alan Dunlop, Alan Dunlop Architects
‘These are startling figures. Opportunities for some architects - those interested in architecture and good design and who have a respect for their craft are - in my view certainly getting worse. Procurement for public projects through government contract websites and OJEU works against good design and is a nightmare for small to medium size studios, particularly in Scotland. 

Procurement for public projects through OJEU work against good design

‘It is a significant issue that our representatives here the Royal Incorporation of Architects are failing or are unwilling to tackle, preferring instead to focus on glorified PR initiatives like the Festival of Architecture. The Pre Qualification Questionnaire (PQQ) process here in Scotland is so onerous that few small or medium size practices get selected for public projects because, despite having the talent, they often don’t have the finances and P.I insurance or resources to get through the red tape. Consequently this has led to large commercial firms, better prepared to tackle the mindless administration form filling, getting the public contracts. 

‘With initiatives like the Scottish Futures Trust “Hubs” Developers pitch for major public projects like schools, hospitals and health centres, bringing in architects as “added value”. Despite the supposed SFT emphasis on good design developers compete based on fees, not quality, which never has good results where design work is concerned, often using architects to produce cookie cutter designs for low fees, using sketch up as the tool of choice. I have been invited onto Hub teams a number of occasions and have always refused. It’s not the way to create architecture or achieve a real level of good design in our public buildings.  

‘To realise truly great public architecture you need those at the helm in government to really think design and architecture is important, not just give lip service to it. That’s not the case in Scotland.’

Andy von Bradsky, chairman, PRP Architects
‘It is widely accepted that the OJEU process is not perfect and industry bodies such as the RIBA and Housing Forum have done much to highlight the problems for both large and small practices.  

‘The picture is not as clear cut as the list of high performing practices suggest. Whilst we may be top of the list for securing a position on frameworks for public sector clients, the list does not necessarily reflect the actual work or fee income secured as the report’s headlines suggest. For example, some clients will nominate a long list of architects and run further design and fee competitions for those on the framework and others have not offered any commissions for the duration of a framework despite achieving a high scoring submission. The considerable investment made in preparing frameworks submissions to convey the quality and efficiency of our practice does not guarantee success but is an essential starting point for further competition.

‘‘All frame and no work’ could be a catch phrase for both large and small practices alike. We need good examples of how the OJEU process is being used intelligently by clients to achieve high quality outcomes at sustainable fee levels that justify the investment made in framework submissions.’

Darren Bray, director, PAD Studio
‘As an SME we backed away from looking at OJEU almost five/six years ago, because there is no possible level of entry for small practices. We are very encouraged that Project Compass are continuing to raise this issues as the RIBA are not tackling this issue at all. Building ladders of opportunity appears to have been dropped and ignored since its publication.

There is no possible level of entry for small practices

‘Frameworks are such a risk long term, especially  when practices have signed up to low % rates during a recession. As these frameworks will continue with low fee rates, even though work has picked up.

‘In terms of architectural competitions, the UK is far behind the rest of Europe and as such the quality of design suffers in every town and city in the UK.

‘For us as a small practice in Hampshire are opportunities for larger scale projects or new sectors are constantly hampered by the OJEU process.’

Robert Evans, director, Evans Vettori Architects
‘We put a huge effort into an OJEU bid to be on our regional framework for architectual services. We came nowhere in the rankings, and haven’t tried OJEU since. The only ‘route to market’ realistically available to us is as part of a ‘supply chain’ working for larger multi-disciplinary firms. OJEU seems to have been designed for the ‘big boys’.’

Ben Derbyshire, managing partner, HTA Design
‘I’d like to think that HTA’s relative success in OJEU, or indeed any procurement process, was in proportion to the quality of service our firm offers to clients.

‘Having said that, I feel sure, based on our work at the Housing Forum at least, that the use of OJEU procedures could be improved (I am its chair and we ran a seminar series for members in 2013). And I do not believe that the fault lies particularly with the OJEU process itself, whose very purpose is to increase fairness and reduce discrimination, as I understand it.  The main problems lie in the increasingly bureaucratic, risk averse and conservative approach of many public procurement offices who compensate for these anxieties by inappropriate over-complexity in their use of the system.

‘The RIBA is promoting a ‘gold standard’ for the use of design competitions which fits within the legal prescription of OJEU procedures.’

Response from the RIBA

Adrian Dobson, RIBA director of practice

The RIBA welcomes the publication by Project Compass of Public Construction Procurement Trends 2009 – 14.  It is a valuable contribution to the debate on the efficiency, effectiveness and equitability of procurement of architectural services in the UK public sector.

Much within the report echoes the findings of the RIBA’s own public procurement survey undertaken in 2012.  There seems little doubt that poor procurement practice in relation to issues such as:

  • disproportionate insurance and turnover requirements;
  • inappropriate bundling of projects into large lots and frameworks;
  • excessive requirements in relation to track record;
  • imbalance between quantitative and qualitative assessment criteria; and
  • high costs of pre-qualification processes

This has created a public procurement environment that places barriers to smaller practices and new entrants. The Project Compass report also highlights the poor performance of the UK public sector in relation to the length of time which it takes to tender and make awards.

Public Construction Procurement Trends 2009 - 14 identifies that some 40% of UK construction industry turnover is in the public sector.  Data from the RIBA business benchmarking survey shows that only 20% of UK architects’ fees are derived from public sector work.  This is largely because a significant proportion of public sector spend is in infrastructure (road/rail/power etc.) in which architects are less involved, so the public sector tail cannot be allowed to wag the whole architectural dog. Nevertheless we know that many smaller architectural practices faced with the costs and barriers to entry to public sector work have effectively opted out of the sector altogether.  At the same time it is important to recognise, as shown in the RIBA public procurement survey, that larger firms also face huge costs because of the wasteful nature of much public sector procurement.

The Project Compass report makes some interesting new revelations:

  • A significant and growing proportion of public sector architectural work is now procured as part of a broader call for multi-disciplinary services (what Project Compass calls architecture+) or as part of a “works” rather than “services” contract for design and build services (what Project Compass calls Hidden Architecture), which architects can only access as tier 2 sub-contractors.
  • An alarming lack of transparency in the reporting of the value of awards made under framework agreements, such that it is very difficult to assess the effectiveness and fairness of such arrangements.

UK Government itself seems to recognise that poor public procurement practice exists and that it is not beneficial to public sector clients in terms of either value or quality.  Initiatives such as the Cabinet Office Mystery Shopper programme illustrate willingness on the part of Government to address these issues but seem to have had limited impact.  The changes being introduced by the new EU procurement directive do offer opportunities to streamline and enhance current public procurement practice.

It is of course much easier to identify the symptoms and diagnose the malaise that afflicts some UK public procurement than to identify effective remedies.  However, the RIBA is currently developing procurement guidance for public sector procurement bodies for publication early in the New Year, which will seek to support more effective procurement and better outcomes on public sector projects.  This will be based around 10 key principles, which will include:

  • Make the tendering process as simple as possible and proportionate to the scale and complexity of your project
  • Establish financial capability, based on the scale, complexity, actual level of risk and value of the design services; turnover and PI Insurance requirements do not have to be used as a pass or fail criteria.
  • Consider a track record of undertaking projects of a similar scale and complexity rather than extensive previous experience of an identical project type when assessing consultant capability
  • Balance quantitative criteria (fees and cost) with qualitative aspects using a qualified design assessor to help with weighting, scoring and assessment.
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